RFC Capital Corp. v. EarthLink, Inc.
Ohio Court of Appeals
2004 Ohio 7046, 55 UCC Rep. Serv. 2d 617 (2004)
- Written by Samantha Arena, JD
Facts
In exchange for a $12 million loan, Internet Commerce & Communications, Inc. (ICC) granted to RFC Capital Corporation (RFC) (plaintiff) a security interest in ICC’s customer base. Thereafter, ICC contracted to sell its customer base to EarthLink, Inc. (EarthLink) (defendant), promising EarthLink that at least 40,000 customers would transfer to EarthLink. Despite ICC’s assurances to EarthLink that RFC had already agreed to release the collateral from RFC’s security interest, RFC had not done so. In 2001, RFC and ICC executed an amendment to their security agreement, which provided that RFC consented to the sale of ICC’s customer base and agreed to release RFC’s security interest in the purchased customer base upon ICC’s complete performance of obligations under the security agreement. However, only 25,144 customers transferred to EarthLink, and EarthLink suspended payments to ICC. RFC brought suit against EarthLink, claiming an impairment of RFC’s interest in the customer base. A jury found in RFC’s favor, and the trial court entered a judgment of $6 million against EarthLink. EarthLink appealed, arguing that RFC had released its security interest upon execution of the amendment.
Rule of Law
Issue
Holding and Reasoning (Klatt, J.)
What to do next…
Here's why 815,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.